Lorem Ipsumis simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged.
This guest post is from Benjamin Feldman (@BWFeldman), writer and content strategist at ReadyForZero.com, a company helping people get out of debt. Is personal debt an impossible problem to fix? No way! Thousands – actually, millions – of people across the U.S. are struggling with personal debt right now, but the situation is not hopeless for any of them. I know, because just last year I was one of them. In January of last year, I had over $3,000 in credit card debt and a vowed to get it paid off before the year was over. I’m grateful that I was able to accomplish my goal and along the way I learned a few things that can help others who are still on their way to being debt free. If that includes you, keep reading to learn the 5 steps that will help you get out of debt: 1. See Your Big Picture For many people, one of the most intimidating parts of becoming debt free is actually coming to grips with how much you owe and figuring out your “big picture.” For example, if you have many different accounts (multiple credit cards and/or loans) you might not even know exactly how much you owe to each creditor and what the interest rates are on each one. So start by writing down each of your debts in order of the highest interest rate to lowest interest rate, along with the total balance for each debt. Be sure to include all debts (like student loans, car loans, mortgages, etc.) and list the entire balance and not just the monthly payment. Then you can move on to Step #2. 2. Get Lower Interest Rates This step is basically like super-charging your debt repayment. Why? Because you can save thousands of dollars if you get a lower interest rate. Some credit cards have rates as high as 25% – that is way too high! But if you followed Step #1, then you’ve got each of your accounts listed in front of you, and that makes it easy to identify the credit cards with the highest interest rates and attempt to get those lowered. Start by calling those credit card companies directly and when you get a customer service representative on the phone ask them politely if they can lower your rate. For anyone with a history of on-time payments, you can explain that you’ve been a loyal customer and always paid on time and that you would like them to reduce your interest rate. Many times this will work! If that doesn’t result in lower interest rates, another option is to see if there are any balance transfer offers or debt consolidation loans that would give you a lower rate. Just remember that some of these offers have hidden fees and interest charges, so be cautious and don’t sign up for one of these offers without reading the fine print first. (You can check out our Debt Consolidation resource center for more tips) 3. Make a Plan Alright, you’ve now completed Steps #1 and #2, which means it’s time to make a plan. This is not as hard as you might think. You simply need to decide how much you can pay each month toward all your debts. Then make sure the amount you can pay is greater than your minimum monthly payments (in other words, all your minimum payments combined should equal less than the total amount you can pay per month). What you’ll want to do next is allocate all your extra money each month to the account with the highest interest rate – because that will get you out of debt the fastest! If you have three credit cards and one has a 20% interest rate while the other two have a 10% interest rate, just pay the minimum on the other two while you dedicate all extra money toward the 20% card. And don’t worry, if you need help creating your plan, you can try using ReadyForZero’s free online tool for paying off debt. 4. Learn to Budget Wisely The next step is to examine your budget closely and see where you can save a little more money to add to your debt repayment. The most important part is to track your spending so you can see where each dollar goes. And look closely to find the things that you don’t really need to spend money on. Things like eating out at restaurants, buying new clothes, or buying music online. When you have debt, it’s an emergency – and that means you can’t afford those kinds of luxuries except on rare occasions. Another way to approach your budget is to look at all your fixed expenses (the things you pay every month) and try to figure out how they can be cut or eliminated. Check out these budgeting tips on how to reduce your fixed expenses, and in no time you’ll find yourself with additional flexibility in your budget. You can also read our blog post on how to make extra money from home, which can boost your income and make monthly budgeting easier. 5. Stay Motivated for the Long-Run The last step is the one that brings it all together. You cannot accomplish any goal without motivation, and getting out of debt is no different. You’ll need to cultivate motivation in order to stay focused and keep pushing forward! One of the best ways to do this is to confide in your friends and family and tell them about your goal of being debt free. Ask them to support you and encourage you, so that when things get hard you’ll think of them and that alone will be enough to help you keep going. If you’re excited and want more get-out-of-debt tips, or if you have further questions, check out our comprehensive guide on how to get out of debt. And no matter what, keep your head high and keep making those monthly payments! You will be debt free faster than you imagine. Photo: Shutterstock
You’re sitting at home thinking about opening up a new business…maybe you’re just planning on relocating an existing office…or maybe you’re looking to do business with a new vendor. Whatever the situation may be, you have to ask the question, which cities are primed for new business opportunity? Where are businesses performing at a high level? Are businesses in City A paying their bills faster than City B? To help answer those questions and more, Experian released its new quarterly Metro Business Pulse analysis on the top metropolitan areas based on business credit data. The analysis focuses on the top 25th percentile of metropolitan areas based on the number of businesses in major industry groups, and looks at four leading indicators of business health including risk score, days beyond term (DBT), delinquency and bankruptcy. • Risk Score — We used our proprietary commercial risk score, which is based on a scale of 1 to 100 (with 100 being least risky) and predicts the likelihood of severe delinquency (more than 91 days past due) within the next 12 months • Days Beyond Terms — The weighted average number of days that businesses paid their bills beyond the contracted terms. • Delinquency — The average percentage of dollars that are considered delinquent or past due. • Bankruptcy — The average rate of businesses filing for legal protection under Chapters 7, 11, 13 or 15 of the bankruptcy code. According to the Q1 2013 analysis, Omaha, NE tops the list of DBT, paying their bills the fastest, with businesses in that area paying an average of 4.75 days beyond contracted terms, followed by San Francisco, Rochester, NY, Salt Lake City and Milwaukee to round out the top five. On the flip side, Florida metro areas are taking considerably longer to pay, having made up four of the bottom five in this category with Miami businesses being the slowest to pay. However, all is not bleak in Miami, as businesses in that area had the fifth lowest bankruptcy rate at 0.43 percent. Businesses in New York City topped the list with the lowest bankruptcy rate in Q1, followed by Nassau-Suffolk, NY, Baton Rouge, LA and Honolulu to make up the remaining top five. To view the full analysis, check out our Metro Business Pulse website. For more information on this report and other business-related insights, visit Experian.com/b2b.
The past several years have been somewhat of an uphill climb for our country’s economy and this has impacted the default rates for consumer credit. However, now that we’re out of the recession, consumers are managing their credit back to pre-recession levels. In June 2013, the S&P/Experian Consumer Credit Default Indices, a monthly comprehensive measure of changes in consumer credit defaults, showed that default rates have fallen at a national level, as well as, in all four major buckets it tracks including, bankcard, auto, first mortgage and second mortgage. Additionally, the national composite and first mortgage defaults rates hit new post-recession lows at 1.34 percent and 1.23 percent, respectively. Also, two of the five cities the indices focus on, New York and Miami, both saw decreases in default rates during the month. The other three cities, Chicago, Dallas and Los Angeles all saw marginal increases in June. However, all five cities remain below their levels a year ago. To view the full press release, visit http://bit.ly/14WuRzx.
Today, we stand at the forefront of a digital revolution that is reshaping the financial services industry. And, against this backdrop, financial institutions are at vastly different levels of maturity; the world’s biggest banks are managing large-scale infrastructure migrations and making significant investments in AI while regional banks and credit unions are putting plans in place for modernization strategies, and fintechs are purpose-built and cloud native. To explore this more, I recently had the privilege of attending the annual Reuters NEXT live event in New York City. The event gathers globally recognized leaders across business, finance, technology, and government to tackle some of today’s most pressing issues. On the World Stage, I joined Del Irani, a talented anchor and broadcast journalist, to discuss the future of lending and the pivotal role of data and AI in building a more inclusive financial system. Improving financial access Our discussion highlighted the lack of access to traditional financial systems, and the impact it has on nearly 100 million people in North America alone. Globally, the problem affects over one billion people. These people, who are credit invisible, unscoreable, or have subprime credit scores, are unable to secure everyday financial products that many of us take for granted. What many don’t realize is, this is not a fringe subset of the population. Most of us, myself included, know someone who has faced the challenges of financial exclusion. Everyday Americans, including young people who are just starting out, new immigrants and people from diverse communities, often lack access to mainstream financial products. We discussed how traditional lending has a limited view of a consumer. Like looking through a keyhole, the lender’s understanding of the person in view is often incomplete and obstructed. However, with expanded data, technology, and advanced analytics, there is an opportunity to better understand the whole person, and as a result have a more inclusive financial system. At Experian, we have a unique ability to connect the power of traditional credit with alternative data, bringing a more holistic understanding of consumers and their behaviors. We are dedicated to leveraging our rich history in data and our expertise in technology to create the future of credit and ultimately bring financial power to everyone. The future of lending After spending two days with over 700 industry leaders from around the world, one thing is abundantly clear: much like the early days of the internet, today, we are at the cutting-edge of a technical revolution. Reflecting on my time at Reuters NEXT, I am particularly excited by the collective commitment to drive innovative, and smarter ways of working. We are only beginning to scratch the surface of how data and technology can transform financial services, and Experian is positioned to play a significant role. As we look to the future, I am excited about the ways we will create new opportunities for businesses and consumers alike.
We believe that financial literacy leads to empowerment. That is why Experian supports initiatives and partners with community organizations to deliver financial education. We also develop products and services that give more control to consumers over their credit profile and financial health. As part of advancing our mission of Financial Power to All®, we are proud to announce we are helping more than 5,000 Hispanic individuals nationwide by relieving $10 million dollars of consumer debt. To provide families with this boost, we joined forces with ForgiveCo, a Public Benefit Corporation (PBC), to administer the acquisition and cancellation of qualifying consumer debt for the selected recipients. Beneficiaries will also receive a one-year premium Experian membership for free that offers access to their Experian credit report in English and Spanish[i], FICO® Score[ii], bilingual educational content, and other financial resources. We hope this effort helps raise awareness of the importance of financial literacy for everyone, and that Experian has resources to help individuals reach their financial dreams. To amplify the message, we collaborated with multi-platinum, award-winning singer and songwriter Prince Royce and you can see his video here. In fact, we have been making a concerted effort the last several years to evolve our educational resources and products to better support all underserved communities. Some of our other activities include the creation of the B.A.L.L. for Life initiative that connects African American and Hispanic youth with financial education, supporting scholarships for Asian Americans through the Ascend organization, providing custom resources for Out & Equal and Born This Way Foundation for the LGBTQ+ community, supporting the NextGen Innovation Lab for Disability:IN, and sponsoring credit counseling for the military community with Operation HOPE. For resources in Spanish, Experian offers a credit e-book and consumers can access a full suite of articles at the Ask Experian blog here. [i] Only Experian credit reports are available in Spanish. All other services associated with an Experian membership are available in English only. English fluency is required for full access to Experian’s products. [ii] Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.
Amid some of the financial challenges that underserved communities experience, members across the financial services community remain committed to championing initiatives and programs that drive greater financial inclusion. In fact, collaboration has led to the inclusion of non-debt related payment information on consumers’ credit profiles, as well as digital services that make it easier to manage money. These efforts have helped to broaden access to fair and affordable financial resources for more individuals. While significant progress has been made, there is still more work to do. However, some of the misconceptions and myths about the financial services community are hindering further advancement. Debunking these myths will accelerate progress by building trust between the financial services community and consumers. Person withdrawing money from ATM contactless Myth #1: “Financial institutions have no interest in underserved consumers or credit invisibles.” The truth is, banks and credit unions want to say “yes” to more prospective borrowers, including individuals and families from underserved communities. Beyond being the right thing to do, it’s an opportunity to potentially build lifelong relationships with a relatively untapped market. A show of good faith to communities who have largely been ignored by the financial system could lead to customer loyalty that may extend to their family and friends. That’s why participants across the financial ecosystem have been proponents of including expanded data sources—such as on-time telecom, utility and video streaming service payments—on to consumer credit reports, as well as exploring other Fair Credit Reporting Act (FCRA)-regulated data sources, including payment data on short-term small dollar loans and expanded public records data. Making this data more accessible to lenders provides a more comprehensive view of a consumer’s ability and willingness to repay outstanding debt—an actionable solution to extending credit to consumers without lenders taking on additional risk. Myth #2: “There is a lack of trustworthy financial education resources.” The financial services community and affiliated organizations recognize that empowering people with financial knowledge and skillset are critical to consumers’ financial success. In fact, banks and credit unions are partnering with nonprofits and non-governmental organizations to better understand the unique challenges and opportunities within specific communities and provide relevant tools and resources. For example, Experian’s B.A.L.L. for Life (Be A Legacy Leader) program, launched in partnership with the National Urban League, serves as a catalyst for engaging with Black communities and low-income youth through live events and digital financial education. Subject matter experts, professional athletes, celebrities, and other influencers share their experiences and expertise, covering topics such as banking, credit, financial management and investing. In addition, to help people improve their financial management, Experian partners with the National Foundation for Credit Counseling (NFCC). The NFCC connects consumers with certified financial counselors to help them address various pain points, including debt management, homeownership, student loans or small business cash flow issues. Myth #3: “Underserved communities have few opportunities to build credit and enter the mainstream financial system.” People from underserved communities, as well as younger consumers and recent immigrants are often excluded from the mainstream financial system because they lack an extensive credit history. Historically, it’s created a vicious cycle; in order to get credit, you have to have credit. Fortunately, there has been a sea change in innovative solutions to address the specific needs of these populations. These include new credit scoring models and microfinancing which provide financial services to individuals who may have been excluded from traditional banking systems. In addition, by incorporating expanded data sources, such as telecom, utility and residential rental payments onto credit reports, lenders have more visibility into consumers who may have been excluded by traditional credit scoring methods.These programs help individuals and families from underserved communities establish and build a credit history that could enable loans, or the ability to rent an apartment or open their dream business. An example is Experian Boost®, a free feature that allows Experian members to contribute their history of making utility, cellphone, insurance, residential rent and video streaming service payments directly into their Experian credit profile. By incorporating nontraditional credit data like paying utility bills on time, online banking transactions, rental payments and verified income data, more people can establish a credit profile that can potentially qualify them for a loan. More Inclusion, Fewer Myths It’s encouraging that community organizations and banks are beginning to see the economic and social benefits of aligning on financial literacy and inclusion. As more initiatives come online, underserved populations will be able to establish a better financial foundation. Then, we can declare the myths to be history.